334… 123… 60… ZERO!
What does this sequence of numbers have to do with the housing market?
It’s a countdown to the end of the $8,000 First-Time Buyers federal tax credit, which covers new homeowners purchasing a primary residence between January 1, 2009 and November 30, 2009 (a window of 334 days) and who have not owned a home in the past three years.
As of this morning, there are just 123 days left until the expiration of the tax credit, but in reality, because it normally takes 45 to 60 to close a property once it’s under contract, buyers looking to take advantage of the $8,000 tax credit really only have about 60 days left to find the perfect home and get it under contract.
But it’s not just buyers who have benefitted from this tax credit. As you know, the market in the Denver Metro region below $250,000 has been sizzling hot this summer, and "traditional" sellers are having more success than any time in the past three to four years. Foreclosures are down and private sellers are finding that retail buyers are out there, especially if a home has been well maintained (or rehabbed) and is in "turnkey" condition.
That means if you have been thinking about selling an entry level home, and you want to capitalize on the strong buyer demand that exists today, you only have about 60 days left to secure an offer before the strong impact of the tax credit incentive starts to diminish.
Many of next year’s first-time buyers have jumped into the market this year, drawn by the tax credit and an incredibly attractive interest rate environment. In a few short months, we could lose the tax credit and see higher rates, a one-two punch that would take some of the starch out of our market and make things more difficult for both buyers and sellers.
Now I don’t advise you to sell your home just because of the tax credit, any more than I would tell you to buy a home because of the tax credit. Homes should be bought and sold because the decision makes sense from the standpoint of your family situation, your employment situation, your economic status and other “life events” that normally trigger moves up or down.
But both buyers and sellers are benefitting right now from this unique tax credit, which is slated to go away pretty soon.
Is there anyone you know who has been thinking about buying a first home or selling a longtime residence?
Remember, I am never too busy for your referrals!
